US court strikes down Trump’s tariffs on countries around the world

A federal court has struck down President Donald Trump’s tariffs on dozens of countries, saying his effort to justify them with broad claims of national emergencies exceeded his legal authority.

The unanimous ruling of a three-judge panel of the U.S. Court of International Trade strikes a blow to one of the central planks of Trump’s economic agenda at a time he is seeking to use tariffs as leverage to strike trade deals around the world.

“Today’s court order is a victory not just for Oregon, but for working families, small businesses, and everyday Americans. President Trump’s sweeping tariffs were unlawful, reckless, and economically devastating,” said Oregon’s Attorney General Dan Rayfield, who filed one of the lawsuits challenging Trump’s tariffs, along with 11 other state attorneys general. “We brought this case because the Constitution doesn’t give any president unchecked authority to upend the economy. This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim.”

The court’s ruling also means that the government may have to pay back duties it has already collected. “Anybody that has had to pay tariffs so far will be able to get them refunded,” said Ilya Somin, a professor of law at George Mason University, who helped argue a case against the tariffs brought by several small businesses.

The Justice Department quickly filed an appeal, setting the stage for more legal arguments over the extent of Trump’s tariff authorities. Ultimately, the case could end up at the Supreme Court.

Trump had justified his imposition of tariffs on dozens of countries based on declarations of national emergencies related to fentanyl trafficking and the threat of persistent trade deficits. Trump also imposed retaliatory tariffs on countries that responded in kind.

But the court found that the federal law that authorizes the president to impose tariffs, embargoes and sanctions in response to national emergencies — the International Emergency Economic Powers Act of 1977 — “does not authorize the President to impose unbounded tariffs.”

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the New York-based federal court, which hears cases on trade laws, said in its opinion.

The court’s ruling nullified Trump’s executive orders imposing 25 percent duties on Canadian and Mexican products and a 20 percent tariff on Chinese products in response to a purported national emergency on drug trafficking. It also struck down a 10 percent tariff imposed on all U.S. trading partners to address trade deficits, as well as Trump’s paused “reciprocal” tariffs of between 20 and 50 percent on 60-odd trading partners, which are now scheduled to go into effect on July 9 if foreign governments can’t reach a deal with the White House before then.

Deputy Assistant Attorney General Brett Shumate, in arguments last week before the CIT, said a ruling that barred Trump from collecting the tariffs would “kneecap” the president’s efforts to strike new trade deals between now and July 8, including with leading trading partners such as Japan, India and the European Union.

“An injunction would be extremely disruptive while the president is in the middle of foreign negotiations with other countries about trade deficits and about the fentanyl crisis,” Shumate added.

It’s the latest legal rejection for Trump on a centerpiece of his policy agenda. Federal judges have blocked key planks of his mass deportation agenda, restricted efforts to dismantle several federal agencies and slowed efforts to mass terminate federal employees from some agencies.

A spokesperson for the White House did not immediately respond to a request for comment.

The Wednesday evening ruling covers a case brought by V.O.S. Selections, a New York-based wine company, and several other small businesses, and a separate case filed by Oregon and 11 other Democrat-led states challenging the constitutionality of Trump’s actions. It was delivered by a three-judge panel that included Obama appointee Gary Katzmann, Reagan appointee Jane Restani and Trump appointee Timothy Reif. No specific judge was identified as the author of the court’s opinion.

Trump could also attempt to impose the same tariffs under other laws, said Nazak Nikakhtar, who worked on trade issues at the Commerce Department during the first Trump administration and is now a partner at the law firm Wiley Rein. “The president still has ample authority to impose reciprocal tariffs, just through other legal means,” Nikakhtar said.

But Somin, the George Mason University law professor, was skeptical that Trump would be able to use other authorities to replicate his reciprocal tariff program.

“I don’t think they could impose anything this sweeping under another statute,” Somin said. “The reason why they wanted to use IEEPA in the first place is because they thought that it could grant them this vast, sweeping authority they couldn’t get otherwise.”

The ruling does not affect other tariffs Trump has imposed, such as those under Section 232 of the Trade Expansion Act of 1962, which allows the president to levy new duties on national security grounds. Trump used the provision in March to widen existing steel and aluminum tariffs and slap a 25 percent duty on foreign auto imports. The administration has launched several other Section 232 investigations that could lead to future tariffs on semiconductors, pharmaceuticals and a number of other products.

That process is slower, however, requiring the administration to first conduct a national security review and solicit public comment before moving forward with the duties. Using the emergency law allowed the White House to act much more quickly.

“Enacting broad-based tariffs via IEEPA was always legally risky, but to enjoin them is surprising and an immense relief for importers at the moment,” said Scott Lincicome, the director of economics at the Cato Institute, a free market think tank. “The big question is whether it will hold up on appeal.”

Several other suits challenging Trump’s tariffs have been filed in federal district courts around the country, including one brought by the state of California and another by members of the Blackfeet Nation tribe who live in Montana and Canada.

Earlier this month, a judge in Florida ordered a case brought by a local paper products company to be transferred to the CIT and a judge in another case filed in the District Court for Washington, D.C. heard oral arguments on Tuesday.

The Justice Department has been pressing to move all of the cases to the CIT in New York, arguing that it was established by Congress to hear cases involving tariffs and had exclusive jurisdiction. However, any hopes it may have had for a more sympathetic reception in the CIT than in the federal district courts evaporated on Wednesday.

“The U.S. Court of International Trade agreed with what I and others have said for months: Trump was clearly abusing emergency authorities in ways not authorized by Congress to impose damaging tariffs on other countries, with obviously pretextual excuses,” Rep. Don Beyer (D-Va.) said in a statement. He has introduced legislation with Rep. Suzan DelBene (D-Wash.) that challenged Trump’s use of IEEPA to impose tariffs.

Beyer and DelBene said the court’s ruling reinforced their calls for Congress to act to reassert its constitutional authority over trade deals.

Megan Messerly, Hassan Kanu and Ari Hawkins contributed to this report.